Employment confidence turns positive for first time since late 2011

New Zealand households' employment confidence turned positive for the first time since the third quarter of 2011, as Canterbury and Auckland dragged up an otherwise gloomy nation.

The Westpac McDermott Miller Employment Confidence Index rose to 100.7 in the first quarter from 99.1 three months earlier on a scale where 100 separates optimists from pessimists.

Employment data is being keenly watched after the household labour force survey for the final three months of 2012 showed the participation rate fell to the lowest level since September 2004, while employment shrank, casting doubt on the strength of the economic recovery. Today's survey results mark the fourth quarterly improvement in a row though the labour market remains subdued.

"Households' job optimism is inching up," said Westpac economist Dominick Stephens. "The fact that it's once again on a modest uptrend suggests that we may see the jobs market firming a little this year."

Households now feel safer in their own jobs, with a net 14 per cent expecting it to improve in the next 12 months, up from 3 per cent in the December quarter. Yet a net 56 per cent said jobs are hard to get a net 12 per cent expect job opportunities to reduce over the coming year, a deterioration from the net 6 per cent who saw worse times ahead in the previous survey.

A net 24 per cent of households said their wages had improved over the past 12 months though those expecting an increase in the year ahead fell back slightly to 33 per cent.

Canterbury remained the most upbeat region, with employment confidence edging up to 113.6 from 113.5, while Auckland showed a marked improvement, up to 104.1 from 96.9.

In Wellington, sentiment turned negative, falling to 97.4 from 101.1. Northland confidence fell to 94.5 from 96.3 while in the Waikato, confidence improved to 96.2 from 95.8. Bay of Plenty confidence rose to 93.9 from 92.5 and Gisborne/Hawke's Bay fell to 95.8 from 96.

Confidence in Taranaki/Manawatu-Whanganui weakened to 96.3 from 97.6. In the South Island, Nelson/Marlborough/West Coast improved to 98.3 from 96.7 while Otago fell to 88.8, the worst result in the survey, from 94.4 and Southland dropped to 95.2 from 97.5.